Fluctuating economy conditions create a well-known
international financial domino effect. When market conditions show negative
response to fluctuations, one of the adverse effects the economy bears is a
tightening of credit conditions. From there, a financial domino effect can
create a larger economic instability, which, in turn, can have dramatic impact
on housing markets.
Let’s look at a recent chain of events that began
overseas and ended up impacting the housing market within Canada:
·
Earlier this year gas prices dropped to lows not
seen in years, to well under a dollar. This resulted in our own dollar sinking.
·
This drop then resulted in the BOC deciding to
take measures to protect the economy by lowering interest rates.
·
In January 2015, the BOC reduced the country’s
lending rate by .25.
This only fueled an existing rate-war between mortgage
lenders.
Think about how this chain of events has impacted your
overall business these last few months. Did you witness an increase in business
as a result?
Now that gas prices have inched their way back up, what’s
next for the Canadian economy - specifically housing and other domestic
economic contributors? Some believe that increased gas prices spell a rise in
the value of the Canadian dollar, which would then prompt the BOC to feel
confident enough to increase interest rates.
However, this line of thinking is based on the assumption
that the only factor impacting the BOC’s monetary policy is the price of oil.
This isn’t the case. So how CAN we predict what will happen next?
If you are a real estate sales professional who pays
close attention to the economy, we're interested in your predictions for
Canadian interest rate activity through 2015. As many believe that recovery
from the 2008 recession remains one of this past century’s most difficult, how
much more complicated would that make any further economic instability?
We’d love to hear from you on this! Please post your
feedback and ideas on our Facebook page, Twitter @GeoWarehouse or in our LinkedIn Group.
Regardless of how interest rates may fluctuate,
GeoWarehouse remains a steadfast tool for your real estate due diligence. Remember, GeoWarehouse is the premier, online
due diligence tool for viewing property ownership history, comparable sales,
value, home ownership, and registered mortgages, as well as obtaining condo
certificates, surveys, Parcel Registers*, MPAC assessment reports and more.
Call us today at 1-866-237-5937.
